Beyond Meat Looking to Stay Hot with New Deal, Products
The plant-based meat substitutes producer may have shed its “all sizzle, no steak” tag after bad results.
Shares of Beyond Meat Inc. (Nasdaq: BYND) were on a steady rise over the past three weeks, and the producer of plant-based meat substitutes may have McDonald's (NYSE: MCD) to thank. When the global fast-food chain announced its new plant-based burger — conveniently named the McPlant — investors quickly jumped on the speculation that Beyond Meat was its partner for the new menu item. <% {"name": "BoxSeenNews", "newsHeadline":" Christmas is early for Fosterville South", "link": "/news/christmas-coming-early-fosterville-south"} %> **McPlant Combo?** Whether the McPlant will become a success remains to be seen, but it certainly fueled investors’ appetite for Beyond Meat’s stock given the potential benefits of such a deal. Just how big the benefits would reach? [According to one analyst](https://ca.finance.yahoo.com/news/mc-donalds-mc-plant-could-lead-to-a-financial-windfall-for-beyond-meat-175438517.html), a partnership with McDonald's could add $300 million to Beyond Meat's top line a year, matching its entire year’s revenue from 2019. Furthermore, Yahoo Finance analysts forecast Beyond Meat’s sales are expected to hit $477.8 million this year and then rise to $748 million in 2021. A $300 million annual boost is significant in that regard. However, investors may want to curb their enthusiasm, as many analysts believe Beyond Meat would not be the only supplier for the new plant-based burger, if it were to “combo” with the restaurant chain. The confusion surrounding the identity of McDonald's plant patty supplier also didn’t help Beyond Meat’s cause earlier in the month, when the [stock sank to a two-month low](https://www.cnbc.com/2020/11/09/beyond-meat-bynd-q3-2020-earnings-miss-estimates.html) on top of disappointing Q3 results. When asked about the “quiet” stance from McDonald's, Beyond Meat CEO Ethan Brown said he respected the chain’s decision to refer to its McPlant line in “generic” terms, adding that: “Our relationship with McDonald’s is really good, it’s really strong.” <% {"name": "BoxPdfReport", "companyName": "Fosterville South", "link": "/pdf-reports/fosterville-south-juniorstocks-report"} %> **Chinese Milestone** The possible McDonald's partnership is not the only area in which Beyond Meat is generating buzz. In mid-November, the LA-based company launched a new product, imitation ground pork, designed to crack the world’s biggest meat market: China. This was considered a necessary step, given Beyond Meat’s plans to build factories near Shanghai. It needed a product to match the local market, and pork was the best bet. For decades, China has consumed more than half of the world’s pork. Even during the swine flu epidemic and the ongoing Covid crisis, domestic consumption of pork remained substantial. However, some analysts see the challenges that Beyond Meat faces ahead. In his recent opinion piece, [Bloomberg columnist David Fickling](https://financialpost.com/pmn/business-pmn/beyond-meat-faces-an-ancient-rival-in-china-tofu) said China already started moving “beyond meat” hundreds of years ago, with a “rich domestic vegetarian tradition to draw on that’s more affordable than the current wave of imitation muscle.” The main competition, according to Fickling, will be Tofu and its soy-based relatives, which have been a central feature of Chinese cuisine for centuries. Nonetheless, for Beyond Meat, expanding its foothold in the world’s #1 consumer is a must, even if that may come with obstacles and risks. That will be something for the company to digest on in the coming years. <% {"name": "BoxNewsletterUnder", "companyName": "Beyond","companyTickerSymbol": "Meat"} %>